Correlation Between MagnaChip Semiconductor and Micron Technology
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and Micron Technology at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining MagnaChip Semiconductor and Micron Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MagnaChip Semiconductor and Micron Technology, you can compare the effects of market volatilities on MagnaChip Semiconductor and Micron Technology and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in MagnaChip Semiconductor with a short position of Micron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and Micron Technology.
Diversification Opportunities for MagnaChip Semiconductor and Micron Technology
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between MagnaChip and Micron is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor and Micron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology and MagnaChip Semiconductor is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on MagnaChip Semiconductor are associated (or correlated) with Micron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micron Technology has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and Micron Technology go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and Micron Technology
Allowing for the 90-day total investment horizon MagnaChip Semiconductor is expected to under-perform the Micron Technology. But the stock apears to be less risky and, when comparing its historical volatility, MagnaChip Semiconductor is 1.16 times less risky than Micron Technology. The stock trades about -0.07 of its potential returns per unit of risk. The Micron Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,581 in Micron Technology on August 31, 2024 and sell it today you would earn a total of 4,239 from holding Micron Technology or generate 75.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
MagnaChip Semiconductor vs. Micron Technology
Performance |
| Timeline |
| MagnaChip Semiconductor |
| Micron Technology |
MagnaChip Semiconductor and Micron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and Micron Technology
The main advantage of trading using opposite MagnaChip Semiconductor and Micron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, Micron Technology can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Micron Technology will offset losses from the drop in Micron Technology's long position.| MagnaChip Semiconductor vs. MACOM Technology Solutions | MagnaChip Semiconductor vs. FormFactor | MagnaChip Semiconductor vs. MaxLinear | MagnaChip Semiconductor vs. nLIGHT Inc |
| Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell Technology Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |